Rupee appreciates slightly against US dollar

KARACHI: The rupee recovered on Wednesday with a meagre gain of 0.01% as investors remained cautious due to a lack of clarity on the government actions to secure funding from the International Monetary Fund’s (IMF).

The local currency closed at Rs176.74 against the greenback in the interbank market compared to the previous close of Rs176.75. It gained 0.01% during the session.

Currency dealers said investors kept a close eye on the developments related to the conditions of the IMF for its $6 billion loan programme.

“The introduction of two important bills ie, Finance (Supplementary) Bill 2021 and the State Bank of Pakistan amended bill in the National Assembly last week delivered a dose of optimism for a currency, but the market and the investors are still sceptical about the fate of the rupee as there is uncertainty about the approval of these two bills from the parliament before the IMF executive board meeting on January 12,” said a currency dealer.

Similarly, the six-month data on the trade balance also sparked concerns among investors. The trade gap widened 100% to $24.78 billion in the first half of this fiscal year due to a sharp rise in imports.

Moreover, demand and supply pressure is also affecting the rupee-dollar parity negatively as exporters are keeping dollars outside which is building pressure on the Pakistani currency.

The rupee has maintained the downtrend for the past seven months. It has lost 16.07% (or Rs24.47) to date, compared to the 22-month high of Rs152.27 recorded in May 2021.

With a fresh rise of 0.14%, the rupee has depreciated by 12.18% (or Rs19.2) since the start of the current fiscal year on July 1, 2021, data released by the central bank revealed.

It is pertinent to mention here that the local unit hit an all-time low of Rs178.24 on December 29.

Read more: Rupee appreciates around 0.27% against US dollar